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Fair Work Commission Announces Minimum Wage Hike

Fair Work Commission Announces Minimum Wage Hike

11 June 2014

The Fair Work Commission recently handed down its decision to apply a 3% increase to the minimum wage with effect from the first pay period commencing on or after 1 July 2014.

The new national minimum wage will be $640.90 per week or $16.87 per hour. The hourly rate has been calculated on the basis of a 38 hour week for a full-time employee. This constitutes an increase of $18.70 per week or 50 cents per hour.

Who is affected?

The increase will apply across the board to all classifications in modern awards and for non-award employees and will also impact the minimum base rates of pay under any existing enterprise agreement.

Where your business is paying employees above the relevant award rate of pay (taking account of any allowances and penalties applied under an award), you will not be required to make any immediate changes or to apply the increase. 

The Commission also determined that for casual employees, not covered by an award, the casual loading will increase to 25%. However, it determined not to make any alteration to the standard casual loading for employees covered by modern awards, noting the transitional arrangements applying in those instruments.

What employers should do

As an employer, you have a legal responsibility to ensure that your employees are paid at least what they would receive under a modern award, registered agreement or national minimum wage order.

Boyce recommends a review of your payroll obligations to ensure you are meeting your responsibilities in readiness for 1 July 2014. You can access details regarding minimum award rates for employees covered by modern awards on the Fair Work Australia website.

If you would like more information about how the Fair Work Commission decision impacts your workforce, please contact your local Boyce Accountant or Gabrielle McFarland, Boyce HR Manager on 6452 3344.

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